Mercedes-Benz dealership rolling into Scottsdale

A Phoenix Mercedes-Benz dealership has announced plans to move to downtown Scottsdale in two years with a new showroom northeast of Scottsdale Fashion Square.

Phoenix Motor Co. will spend an estimated $25 million renovating a three-story office building at Highland Avenue and Scottsdale Road and building a 10,000-square-foot Mercedes showroom, said Chuck Theisen, who owns the dealership, which has been in his family since 1964.

"My reason for doing that is (Scottsdale) is where my customers live," Theisen said. "Where I am now used to be a thriving area."

Relocating the Phoenix Mercedes dealership from Third Avenue and Indian School Road to downtown Scottsdale is the latest development in an ongoing shuffle of car dealerships in and out of Scottsdale over the past decade.

Scottsdale's Motor Mile on McDowell Road has seen a dealership exodus in recent years to Mesa, Chandler and Phoenix.

In 2005, Schumacher European-North Scottsdale moved its Mercedes dealership from the Scottsdale Airpark to the Phoenix side of Scottsdale Road just south of Loop 101. It cashed in on $3 million in incentives from Phoenix.

Scottsdale officials said Phoenix Motor Co. is not asking for incentives or subsidies from Scottsdale to bring the dealership and 150 jobs to the city.

Scottsdale Mayor Jim Lane said the city is thrilled with the prospect of Mercedes coming back.

"A luxury auto dealer would fit well in our thriving downtown and have a substantial positive economic impact," Lane said.

A preliminary economic study by Tim Hogan, an Arizona State University professor emeritus of economics, estimates that the Mercedes dealership would contribute $30 million to the local economy over 10 years through sales and property taxes.

The car dealership is allowed under current commercial zoning on a nearly five-acre site at 4725 N. Scottsdale Road, but Phoenix Motor Co. must obtain a conditional-use permit.

Theisen said he is under contract to buy the site and expects it will take 18 to 24 months to build a showroom and renovate the 80,000-square-foot Highland Park Office Building.

The Safari Drive condominiums are southeast of the Highland Park property, which includes a two-story parking structure. The 44-unit Royale Gardens condos and the Sarkis Manor townhouses are to the north.

Gray Development Group plans to build 749 apartments in the Blue Sky project south of the site.Scottsdale said public hearings on the dealership's required use permit, held before the Scottsdale Planning Commission and Scottsdale City Council, are likely to occur in October and November. 2012

Theisen, a 1967 Saguaro High School graduate who took over Phoenix Motor Co. in 1980, said the new dealership will incorporate green-building standards.

"I would hope that other makes would see the beauty of downtown Scottsdale and being around Scottsdale Fashion Square," Theisen said of other luxury carmakers.

Phoenix Motor Co. is planning to move from Third Avenue and Indian School Road to a new showroom at Scottsdale Road and Highland Avenue northeast of Scottsdale Fashion Square. The dealership will also occupy and adjacent office building that will be renovated.